From 1st January, digital platforms will be obliged to collect and share data with HMRC.

Online sellers using services including Airbnb, Vinted and eBay will have to comply with the new rules for declaring income in a new initiative to clamp down on tax dodgers.
Digital platforms will be required to report the income of their sellers on a regular basis. This will apply to the sales of goods such as handcrafted products, second-hand clothing and services including food delivery, taxi hire, freelance work, short-term accommodation lettings or even driveway renting for parking.

These platforms will be treated more like traditional businesses and the new rules will ensure individuals are taxed correctly based on their income.

What do you need to do?

• No action needs to be taken for online sellers already declaring their profits on annual returns – HMRC are targeting people making profits that are NOT being declared for tax purposes.
• A £1,000 allowance for "trading" income applies each tax year to all UK taxpayers - this typically provides an exemption for income from offering tutoring or gardening, or if you are selling new or old second-hand items online. The limit applies to turnover, NOT profit, so if you receive more than £ 1,000 then you should make a declaration.
• Individuals with an income below the trading allowance may not have to fill in a tax return but should keep records in case they are asked for them.
• Even if your profits are below the personal allowance of £ 12,570 per annum, there are national insurance obligations arising from trading, and you should therefore seek professional advice to ensure these are fulfilled.

How Jerroms can help
As an online seller, if you receive more than the £1,000 trading allowance, you will need to register with HMRC to avoid penalties and ensure you have complied with your obligations.

As a Jerroms client, our experts will keep you informed as and when these changes occur and be ready to support your through the process. Your assigned account manager is available to answer any queries you may have and make sure that you are compliant with UK laws and reporting requirements.